Johnson & Johnson reported fourth-quarter adjusted earnings per share of $2.82, surpassing consensus estimates by $0.10, while quarterly revenue rose 6.5% year-over-year to $24.1 billion, exceeding the Street by $300 million. Strength was driven by a 9% increase in pharmaceutical sales, led by oncology and immunology franchises, and a 4% uptick in medical devices, supported by strong orthopedics procedures in North America.

The company updated its multi-year framework, forecasting free cash flow to climb from approximately $18.4 billion in 2025 to $21.0 billion by fiscal 2026, representing a 14% increase. This projection incorporates plans for disciplined capital spending of $3.5 billion and anticipated working capital reductions of $1.2 billion. Management emphasized that robust cash generation will support both continued debt reduction—down from $30.2 billion at year-end 2024—and accelerated share repurchases.

Following the earnings release, Cowen & Co. reiterated its Buy rating on the stock and raised its 12-month target from $222 to $250, citing margin expansion potential and improved R&D productivity. Zacks Investment Research’s Earnings ESP tool identifies a positive surprise factor for upcoming quarters. Given J&J’s stronger cash profile and diversified pipeline, several strategists recommend broad healthcare ETFs—such as the Vanguard Health Care ETF and the iShares U.S. Healthcare ETF—as lower-volatility vehicles to capture the momentum in the sector without single-stock concentration risk.